Quhuo Limited Q2 FY2022 earnings call

• Quhuo continued its revenue growth first strategy in H1 2022. Gross profit increased significantly due to improved operating efficiency and cost control. - Community service products saw increased demand, with business coverage in major economic areas of first and second tier cities. - Pioneered exploration in laundry services and used SaaS system to empower community service providers. - Helped nearly 500,000 workers find jobs, with 22.06% having college degrees or above, creating social value in employment.

In the first half of 2022, total revenue of Quhuo was RMB 1,863 million, relatively stable compared to RMB 1,838 million in the first half of 2021. Revenue from on-demand delivery solution was RMB 1,753.8 million, a slight increase from RMB 1,757 million in the first half of 2021. Revenue from mobility service solutions was RMB 56.5 million, up 32.2% year-on-year. Revenue from housekeeping and accommodation solutions was RMB 43.4 million, up 24.7% year-on-year. Gross profit increased by 89.6% year-on-year to RMB 93.9 million, with gross margin at 5% compared to 2.7% in the same period last year. General and administrative expenses decreased by 22.8% year-on-year.

Barry Ba mentioned that they believe in Q4, the company will achieve better results not only in revenue but also in gross profit.

Q: How has the Chinese economy and COVID policy impacted the business in the September quarter and beyond, specifically on on-demand delivery and other segments?

A: Leslie Yu stated that the dynamic zero policy led to increased demand for home services, total revenue of on-demand delivery solution faced slow growth, while mobility service and housekeeping/accommodation solutions achieved satisfying growth, and they expect better results in Q4.

Q: Is it challenging to find workers for the fulfillment network given the zero COVID policy?

A: Leslie Yu responded that the lockdown policy stabilized the workforce, and they provided support to help workers focus on services, facing less challenge in recruiting and deployment.

Q: How will the company's strategy change in the future?

A: Leslie Yu said they will maintain development of fulfillment services for platforms, jointly promote community service ecosystem, empower existing community service providers with SaaS plus service, and organize social resources and service providers together to grow.